in literacy and tried to bring that emphasis to her husband's administration. they listen, they give advice which has sometimes raised the >> you know, there's the question of accountability. i think anyone who thinks that the first lady is not influential not influential is really not being realistic. >> use blends much of your life who,ining the first lady perhaps more than anyone else, for better or worse, raised the label "modern." the notion has grown that she is the most influential modern first ladies. how much truth is there to that? is there a danger in defining afluence along, for lack of

better word, politically activist terms. >> i do not think eleanor roosevelt, as much as i admire her, was the most influential first lady in american history. she had an enormous amount of influence wash was there. not. not only in terms of articulating president's -- president roosevelt's andiatives from attack expanding the democratic party coalition. you know, having a huge role in shaping social security. the homestead pottage act. the youth administration. the federal loan oh grams. to antecedent, if you well, be national endowment for the arts. she helped influence the administration. and -- were profoundly

effective party organizers. some of those students that i grassrootsk for organizations campus and use eleanor roosevelt's training manual for canvassing. she was influential in shaping policy. i think that nancy reagan and hillary clinton were more across-ial on specific the-board policies. >> let me interrupt you for a second, i am fascinated with what you say. i'm trying to define influence. in terms of public influence and intimate influence. >> ok. saye say that, then i will that's at the two most critical

moments of our history in the 20th century, if you look at the great depression and world war will allow me to take off my first ladies hat and put on my full historians hat. talking 25% unemployment, we are talking 40% unemployment. we're talking what half of every mortgage in the united states at risk of foreclosure. one out of every two mortgages in the united states. we had lost 47% of our national income. our country was in profound crisis. if you were talking about someone who could help the american people cope with that and find hope in themselves encourage and not blame themselves, but hold themselves

a hugeible and build commitment to what mr. and mrs. , shevelt wanted to adopt was profoundly important. let me give you two examples. in her first seven months in she got more personal letters than any first lady in the history of the united states pre-computer. i'm talking on new straps. used paper towels. craneere written on fine stationery. she organized a communication system in the white house where every person got an answer. i want you to think about this. you are writing on a scrap of newspaper that has food stains on it. .ne woman wrote her they had never met.

she enclosed to rings in her correspondence. her engagement ring and the ring she inherited from her mother when her mother died. she was a republican from upstate new york who is desperately poor. she was pregnant and did not have money for diapers and put ,er collateral in rings expecting elenor roosevelt to get these to rings and hold onto them until her husband's, who was an engineer, finally got a job and could regain the rings back. if you're talking about influence, she is a rock star. that loud expect hoover. some of that. -- lou hoover received some of that. >> no jewelry. you.bert, let me ask

you have written about the young elenor roosevelt. was amediate successor woman who never imagined herself in the office. is she influential? are talking about bass truman. i like to look at influence in the following way. the first lady is unelected, on appointed, unpaid. it is not a job. it is without a portfolio. it is not part of the constitution. it would seem to be a liability, but it is an asset. it has allowed first ladies to pursue interests. in response to richard possible question, i look at this two ways. one is personal. the first lady lady, as myra said, i'm putting words in your that, is the last person

the president sees when he goes to bed at night. thes the first person that president sees when he wakes up in the morning, for most presidents. how many senior presidential aides can say that they knew the --sident well before he knew before he was in politics? there is a pillow influence. best truman was not a political activists. she was the opposite. every chance she got, she got back to independents. harry truman was not joking when called her the boss. he said that he never made a series decision without consulting bass. a fellow named ted heckler were speechwriters for truman. they would sit down with truman and they would have these check sessions. truman would say that

he likes this or did not like that. truman would say the same thing. bys, i'm going to run this the boss. we will finalize it tomorrow. even best truman played a role will stop secondly, there is a social influence role. we do not have a monarch. the first lady -- they can about michelle obama -- she has been on more than kim kardashian. mrs. obama is iconic figure. all of these first ladies are. they rank in the top 10 most admired women in the world. usually number one or number two. ms. roosevelt goes out and embraces marian anderson. she was going to perform an operatic performance. the daughters of the american revolution found out that she was african-american and did not want her to perform. onto toroosevelt goes

the fields and teske -- in tuskeegee and championed their cause. collected foodln and clothing for slaves to move to the capital city. betty ford did more to promote breast cancer screening among women than anything before or since simply by her being the first lady. imagine have thousands of women -- there are letters from thousands of women who went out and got screened because of betty ford going public. there is a social influence that goes into the office we cannot measure as easily. easy to dismiss,

quite rightly, to condescend the fashion and style. there are reasons why we talk about certain first ladies as substance. style and for some, style is substance. the president has become celebrity in chief. wife no accident that his has higher poll ratings, sells , is that because there is a a way of humanizing the white house? of universalizing, through the experiences of a mother and wife question mark >> i would disagree. you. much as i like

>> you are disagreeing proactively. >> i would say that the first lady reflects the schism in the united states about what women are supposed to be today. in we supposed to be mom and chief? are we supposed to be first mate? -- ifigate that's, that's the president is supposed to be , is of state and government she supposed to be mom in chief. if she is supposed to be first mate, she has to understand what is going on in the administration and in the country. she has to understand her husband's political agenda.

you cannot separate how the first lady presents herself and the conflicting expectations that the country still has four working wives and mothers. this, why is you the country as smitten in its understated way with mimi eisenhower. mimi fudge was the only dish that she could make. >> a good one, i bet. >> she set a standard. it seems, she gave way to her opposite who became a phenomenon along with her husband. ways, an impossible act to follow.

how can we go over night from one extreme to the other other?n mark -- that ase always look at the major breakpoint for the modern first lady. when she comes into office, she is 32 years old and has two young children. she is attractive and a fashion icon. kennedy is speaking about the peace corps and the new frontier a.he is embracing -- a phase of camelot. those of you who are of my recall an problem called "the first family."

it made fun of kennedy. voices oftated the his brother and parents, lyndon johnson, and the country laughed along with them. it was emblematic of their affection. >> this is a time when television begins to define a bud lite and journalism. 14,s and, on february jacqueline kennedy does something that no other first lady has done, she takes the country on a tour of the white house in black and white. i show that too by students and they say, what is wrong with the color? what? guess we did not have television in color until 1965. part ofthat that was

it. these potion of television and really seeing what was going on in the white house. >> jackie kennedy was still beloved for her fashion. it allowed that program to win andnd -- to win an emmy have unbelievable viewership. historic renovation and it keeping the white house as the country's house. >> built here support for our husband's administration. >> that too. that to. >> his polls were in the toilet. the white house did not want mrs. katie to do that tour. it was a bloodbath. a total bloodbath. happen, just to think about how far she was pushing that envelope. think, back at it and we oh, isn't this easy? isn't this gracious?

it was gutsy. >> it was. but, back to fashion. the fact that she was such a fashion icon allowed her to be that tour.in michelle obama, look at the sales of laura ashley or what ever stores at the mall when she buys something off the rack. the sales go off the roof. she wear american designers. ethnic designers. she puts folks on the map will -- she the above went puts folks on the map. of marthaequivalent washington wearing homespun. my new book is called "affairs state." turco --

frances cleveland was a jackie kennedy figure. they wanted mrs. cleveland's clothing. she said that she would not wear a restrictive thing. --t ended the core set corset. nancy reagan was more than lipstick and high heels. the media portrayed her monolithically. there's is more to her fashion sense. -- there is more to her fashion sense. michelle may be a fashionable woman but, she is a ivy league attorney. she has had all. she is the image of the american woman. we look at first ladies for that. and i say, thank goodness. look atrather have them

first ladies then lindsay lohan. their influence is hard to measure. mie, the bangs were an influence. they would ask her about her politics and she would say, i flip pork chops. it was a cutesy and fulks see kind of way of disarming it -- folksy kind of way of disarming it. the first lady does not have a bullet -- a bully pulpit, but a velvet glove. avenue does presidential ads with the "i like ike" campaign.

>> would someone like to take a stab at the perennial question. oh gosh. i better not say this. no, no, no. >> we can cut this. >> i know the people at c-span. they will not cut this. >> let me regress. isn't it true, in some ways, that we are all about progress. it is immutable and it is like an escalator. there's nothing to stop it. you can define progress your own way. unlike elenor aoosevelt, can you imagine modern first lady having a weekly column and radio show.

it drew larger audiences than the fireside chats. >> not all of them. >> it did not wear out her welcome. fdr had a sense of the dangers of overexposure. years, could a modern first lady say what eddie safer in to morley 1975. with the spin doctors and media handlers, would they stand with it. >> they can stand for it when she said. >> it was already said. >> it was already said. i think they could. it depends on the circumstances and the use. i hope they would take courage

from betty ford and elinor roosevelt. i hope they would take words from laura bush -- i'll go take courage from laura bush and mary todd lincoln, who was not crazy. >> she was difficult. >> i don't care. i don't care. wait. wait. difficult is not crazy. let's just say that john wilkes booth shot the wrong link n. -- lincol c-span, turn up the camera. richard i want to put you in the middle of afghanistan. i'm serious. i want you to have no anesthesia. i want you to see body parts.

i want you to hold an arm while a medic with a saw cuts off the 's elbow.oldier >> your indignation has been registered. >> she is not crazy. she is flirtatious. the two most powerful political men in the united states of both parties asked her to marry her. -- them. i rest my case. >> the drama for the lincoln- douglas debates were personal. >> i feel like i am in the blitz. i want to offer a different example. i really do. posed was,n that was as bettyeone come

ford did. wasthing that came to mind hillary clinton's speech on human rights. many people do not want her to go. it was a last-minute decision for her to go. that thishad decided was going to inform where she was going to speak out when she spoke on human rights. uncomfortable with her particular speech. she said that women's rights are human rights. and human rights are rights once and for all. said, yeah, of course. they did not cover the speech in china. that was repressed. i wonder if mrs. obama want to

go abroad and do that, if she could get away with it. i don't know if we will get an answer. >> i think they can. i think laura bush did an extraordinary job. when hillary gave that speech in not only did my soul stand corrected, but the women who are in that facility who i work with and spend most my time working with, these are women who risk their lives every day in ways that 99% of you in this room can never understand, they took that speech like they took laura bush's address to afghan women and wrapped themselves in it and they went home and they still would encourage. would -- stoodll

in courage. tell all the women activists i know in china. they know about that speech. asked women in africa. -- ask women in africa. they know about that speech. we think think about influence, we have to look the on our beyond ourazines -- fashion magazines. we have to look at people who are struggling to find the current to get up to do their jobs and survive. they are of profound importance to them. throughrewdness comes in ways that we do not anticipate. >> let me point out something, there is a distinction to be made.

, theoldness and bravery farsightedness, that, for example, mrs. clinton showed in making that speech. about domestic politics and the impact of first remarks, -- notpposed to fairly or being perceived as weighing in on the culture wars here at home. are there still boundaries? are there still subjects? hillary clinton is an example, she got in trouble with this perception that she was overstepping. not going to stand by my man baking cookies.

after the scandal, she baked cookies for the press corps. >> and one the bake-off. clinton, the country eventually came around and supported her. betty ford, after that interview, in the first couple of weeks, lots of letters were her that were skating and critical. she talked openly about marijuana use and teenage promiscuity. that is the conversation you have to have with their kids. the country came around to the wisdom of what betty ford did and supported it. carter with his interview. -- people saw his

numbers going down. administration realized they had to be proactive to stand with mrs. ford's remarkable candor. the election was so tight in ohio just you have the three suburban cities. you have columbus, you have cincinnati, and cleveland. the question for me, that i it's, as the administration -- as the election is getting tight, why would you not send baby back to the ohio suburbs will stop every time she went, her numbers spiked. both fords told me that they thought that was the single biggest tactical mistake that they made in the 1976 of election. do not look at this as a blip.

blip this happens in playboy. continuum of how we process the information. is whatrocess it richard is trying to get me to acknowledge. is that right? >> can i respond to that. i do not know what the hell you said. >> i think richard is right. she is unelected and unpaid. i think that is uncomfortable. theaw that in some of comments that mrs. obama made during the campaign. she was proud of her country. the country came around to this. betty ford should be remembered ,s we are doing this program while the supreme court is

considering same-sex marriage, betty ford favored marriage equality before anyone else did. lyndon johnson got in trouble with his civil rights policies. she spoke truth to power. it's controversial for these first ladies day one. what might not get a president votes day one, ultimately they re back. they're socially influential, they're moving the country down he road. weaver -- >> let me try to redeem myself with mrs. lincoln's admirers. there's a great tragedy attached to lincoln. there was unusual political partnership. politics brought them together.

she was far in advance in terms of her interest and her sophistication regarding politics for well bred, well read young ladies. she had a great admiration for enry clay. you could make the case, as a atter of fact i would make the case there never been a mary lincoln, that probably would not have been a president abraham lincoln. that said, the war comes along and consumes him. in some ways devours him and profoundly affects that partnership. it's that part of the tragedy of mary lincoln. question of what her medical diagnosis was.

for get that for a moment, the fact we can all relate to this woman who is losing a great love of her life. ironically once he achieves their common objective. >> i would agree. i just like to move it on a little bit. the presidency is a tremendous crucible for marriages. i think that part of the tragedy of some of the white house marriages has been exactly what you pointing o. i think there are other women in the white house who seen the -- trying to deal with vietnam. just watching everyday as it just ate away at him. by the way, that's when i think the first lady can be at her best because that's when she

can provide the most support and can be a soundingboard and can encourage the president. same thing by the way with herbert hoover. everyday the depression was killing this man she dored. >> we heard laura bush tell us hat one of the great comfort she can provide for george w. bush was try to lift his spirits during the war. >> mary todd, lincoln would joke and say that the toddes needed two d's and god needed one. it was a strange marriage from the get go. they were political partner.s. abe lincoln was one of the few men that respected that mary

todd had a political opinion. when it came to judging his political enemies and men, she was right. they had that in common. they both also lost their mothers at a young age. there was some things that helped them stay together. lot of these marriage, the roosevelts, lincolns and clintons. marriage and child rearing all of this is difficult enough, of course not for me, but other things. it's difficult enough but imagine doing it in a fish bowl. mary todd is raising little children. bill clinton with the way rush limbaugh and the other people went after clinton and the bush people getting attacked for other teenagers does. some presidential marriages, some of them seem to blossom in the white house. the reagans, some of their

happiest years and they were together and certainly the president relied on his wife for more than just tea or fashion. >> i think in the case of the ford, obviously we can ask susan and see. mrs. ford was delighted. she saw more of her husband in the white house. he wasn't out on the road 200 nights a year. >> let me ask you about a conundrum facing modern first lady. they're more visible than ever nd some ways they are more popular. they have mass followings. their poll ratings are often higher than their husbands. some ways because they're also seen as less protestant in their politics. >> i don't think so. >> genericically.

this is the balancing act. the type rope that they walk is in effect, they are the most valuable political asset the administration has. yet that asset could be damaged if they're allowed to become too overtly political. >> i think that's fair. if you look at -- i think they have their cake and eat it. f a president sits down for an interview, he will be asked about anything under the sun. there is no good answer for the type of jobs growth that this country wants to see. nine out of 10 interviews with the first lady, she'll be asked about child raring and a new dress she's worn or new dinner

at the white house. those are softball questions. it's a win-win for the administration. the recent first ladies have been extremely articulate. they've done good jobs both republican and democrat. by them getting in these interviews, they get softball questions. it's the magazine that the masses read. if they go with mrs. obama dances with jimmy fallon and goes on the view or cracks jokes with david letterman. >> i would argue that's because the american people no longer read newspapers. i would say that's because the vast majority of american people get their information about the president and the white house from nonauthoritative sources. they're not all garden. they're not all fashion. they're not all arm muscle and they're not all child bearing. i do think, i think michelle obama is an exception.

i think if you go back and you look at the, the juggling act, i mean that in a way not condescending. i mean a way of juggling the war in iraq and don't ask and don't tell. you cannot tell me laura bush got softball questions. you cannot tell me that hillary clinton got softball questions. you cannot tell me that barbara bush got softball questions. what barbara bush did she had two books about her dog and said i'm not nancy reagan. you're telling that barbara bush didn't answer questions about iran contra. what are you smoking? >> i will disagree. nine out of 10 questions were softballs. those were exceptions and not he rule. usually when asked the first lady sidestep them.

nine out of 10 political questions is something how do you handle the campaign trail or balancing of the family. first lady chooses to say no comment, it's completely acceptable whereas if a president says no comment on that issue -- beth truman for example had a press onference. the transcript goes like this, are you going to be down in mines like eleanor. she says, no comment. then they say are you going to be flying in an airplane with the tuskegee airmen. o comment.

after about 20 of those, they ask if there will be another press conference, she said no. if harry truman did that, they would have impeached him. >> i think that, that's the job of the first lady's press secretary is to control the press. if there wasn't a control press arena, they would get those uestions like boom boom. >> what about in the age of the internet, also contributing to the political culture. irony has turned into a snack or turned into whatever. what are the implications for this for now and the uture? >> i want to mention something i always found fascinating. i heard paul begala speak at a conversation.

he said the clintons entered the white house, there were 500 websites. probably 500 websites get set up every hour now. it wasn't an issue for the clintons right away. here's an awful lot of information out there. moving forward, i would believe every administration and the office of the first lady really have to focus on social media. >> let's not forget talk radio.

>> absolutely. >> democracy in its most pernicious form. >> what raises the question, does it mean that future first ladies deal with this by choosing the most possible causes? things that will not give offense to anyone. > i think it's going to be tougher and tougher to control the message as it already is. ith the social media there's o controlling that message. they operate from different journalistic standard than the other media. this is my expertise and i will refer to her on the details. it's a two way street, the obamas are both on social media. it allows them to connect with

thousands of thousands people. obama will fill out his ncaa tournament brackets and michelle will send you information on a recipe or fitness tip. that connects with people in a profound and personal way. by the same token you can't troll it. -- control it. if you went to google image and if you typed in michelle obama, one of the pictures came out was michelle obama as an ape. there's no controlling that. the first ladies are becoming, i think fair game for all the nastiness that richard talked about and hate radio. >> i think they've always been there. i think the new media as ratcheted it up. dam scott was eviscerated in the press. eleanor roosevelt, -- >> i thought had wanted to orrow her dress.

>> i guarantee you that somebody is going to download this from c-span. they're going to edit something out to change the intent of what we say -- >> i hope they will. >> only you richard. >> if the women and the men who inherit this position live their life by that, they will spit on the people who came before them. because the courage that it takes to live in this bubble, to assume this pressure and always feel inadequate not just in terms of how can you support our spouse but how can you support this country. is an act of heart-sucking courage.

if we don't give credit for these women for accepting that responsibility and realizing that they're influential in a variety of ways, beyond food, beyond fashion, beyond movies, beyond book reviews, beyond child rearing. the role they have to play in influencing not only our perceptions of democracy and government but the world's perception, then we do a profound disservice to our country. >> two quick examples. real quick. allida is right, there's a long history and it's worse now for social media. u.s. grant's wife had a cross eye. some of his critics attacked her for that to the point back then she contemplated orrective surgery. mckinley i believe had epilepsy. her husband's critics back to that time, we did not have an empathy or understanding, they went after her for that.

imagine how difficult that was for first families. they've been getting hit since martha washington criticized or having too many horses. there's a long history of this with them stepping up into the lime light and taking shots to the chin. >> we have just a few minutes eft. i want to move to the personal if i may and ask each of you to pick a first lady about whom we don't know enough for whatever eason. presumably because you admire er or she has some relevance to this audience or even to the future of the job. bob? >> all right. the reason i wrote the first book was sarah's children's poem. presidents from number eight to

martin van buren to number 15 were some of the worse presidents we ever had except for polk. polk was a pretty good president. i was going to do a book on why polk was a good president. i learned about sarah polk. there was a letter from franklin pearce who will go on to be our 15th president. he said the best political conversation i had in washington was polk. there was this old saying, mrs. polk is certainly a master of herself. what you find that sarah polk went to congressional sessions. she edited her husband's speeches. he only served one term and died short after. the margin, you see her scribbling and she cut articles out.

to the point she was unpopular among a lot of women at the time because if you won't a party and the president and the guys will go back and smoke cigars and drink bourbon and the first ladies will host teas. sarah polk would talk about politics. she was very interested in politics. i seen her kind of an eleanor roosevelt 100 years before eleanor. which is why so often seen as unpopular person. i found her absolutely inspiring. >> myra? >> well, okay. well, i always admired lady bird johnson, i will always be in debt to nancy smith who is in the audience today who helped me to learn about her at the johnson library. i admire mrs. johnson, she was the first lady that i interviewed in my work.

i was asking her questions and i was scared to death. she could not have been nicer. when i would finish a conversion she would say to me, now myra, you would probably know that. she knew better than what me, what i was asking. my admiration for her knows no bounds because it's something she did in 1964 and that was she got on a train in alexandria, virginia, she rode it down to new orleans during the presidential campaign gave 47 speeches over the course of four days and descended the civil rights act. it really was a gutsy thing to o. she carried that fourth rightness and those guts into the way in which she dealt with project head start and a poverty program. she was just a world wind with environmentalism and someone

that i wish we knew more about. >> good. allida? >> on lady bird johnson, the historian william documented how dynamite was placed along those tracks because it was very clear after the civil rights acts of 1964, the democratic party that the south was no longer going to be in the camp of the democratic party. it was mrs. johnson who went to lyndon to say, no southern gentlemen is going not come see me. when there was dynamite on the track, she kept going. she refused secret service protection and i can document at least a does assassinations on her. she went anyway. think what i would like

people to know -- i'm a lifelong hillary clinton democrat, i want hillary to be president. i love eleanor roosevelt, everybody clear on that? i want the world to know what laura bush is doing with the red ribbon, pink ribbon program. as much as betty ford who was extraordinarily kind to me did for breast cancer. pat far is saving lives in ways that we cannot possibly imagine. there are millions and millions and millions of lives saved because of the emergency plan for aid relief in africa. i will go to my grave believing that laura bush was the soul

behind it. i want you to hear me say i'm a hillary clinton democrat when i say that. >> allida i never would have guessed. nothing else, we learned there are many kind of influence as there are first ladies. myra, allida, thank you very uch. >> thanks guys. >> thank you. >> visit our website c-span.org/first ladies and follow us on twitter. starting next week, through august 26th, we show all the programs from the first season of first ladies influence and image. it starts next monday with a life and legacy of martha washington at 9:00 p.m. eastern ere on c-span.

>> coming up on c-span a panel discussion about deficit eduction and the u.s. economy. then the plaque caucus talks about violence in the urban communities. >> on c-span 3 tomorrow morning financial regulators testify about the threat of financial market collapse. mary joe white will take questions from senators on the banking committee. live coverage starts at 10:00 eastern. then later in the day also on c-span 3 the natural resources committee investigates way to manage the nation's nuclear waste. watch live coverage at 2:30 .m. eastern. now a conversation on the federal deficit, federal

spending and the u.s. economy. the center for american progress hosted this 90 minute iscussion. >> good afternoon everyone. thank you very much for joining us. linden. s mike i want to thank you and welcome you today. for the past three years, the economic policy debate here in washington has been dominated by one central issue, the federal budget n. 2010 estimates suggested that publicly held debt was on track to surprass 100% of g.d.p. by 2023. this alarming trend prompted

many people in washington to offer a variety of policy solutions to bring the federal budget on to a more sustainable course. today the budget picture looks significantly different from what it did three years ago. projections now have the debt declining slowly for the next five years before creeping upward again ending up in 2023 at about the same levels where it is today. this fall washington is likely to be consumed yet again with talks of deficit and debt and spending and taxes. and before october 1, congress will have to figure out a way to enact funding measures to keep the government open and sometime in october or november we may find ourselves again in a fight over the debt limit. how we should approach these issues and how they fit into larger economic questions of unemployment, inquality and

economic mobility depend substantially on what we think the improving budget projections mean. given new budget realities, are they new is one question? should deficit reduction take center stage? has the deficit reduction we've accomplished helped or hurt to date? and how do we move forward to address the nation's significant economic challenges? to discuss and likely disaagree about some of these questions we are honored to have our distinguished panel. jared burn steen is a fellow on budget priorities. e served as the chef economist to the vice president. executive director of the task force on middle class and a member of president obama's economic team. prior to joining the ob --

obama administration he was at the economic policy institute here in washington. robert has been with the concord coalition since 1992 and served as executive director since 1999. he was part of the debt reduction task force. before joining concord he practiced law and served as the chief staff attorney at the ourt of appeals in virginia. mia is a member of the campaign to fix the debt steering committee. she serve add long side bob on the debt reduction task force. she's worked on wall street and t the washington post. near ra is the president and the c.e.o. at the center for american progress.

she was one of the first staff members here when we opened our doors. since then she has served as the legislative director for senator clinton, for the domestic policy director for president obama eafs campaign and then senior advisor for health reform at the department of health and human services. and moderating today's panel will be david. david is the chief of washington bureau at the "new york times" company. he write it is weekly economic column for the business section. he also serves as the staff writer for the "new york times" magazine. in 2011 david was awarded the pulitzer prize for commentary. prior to joining the times in 1999 he worked for business week magazine and the washington post. i'd like to welcome them all to the stage now and give them a

warm welcome. [applause] >> thank you michael. thank you all for coming. so we're not going to do opening statements. we're going the talk for a while up here and have a little bit of a discussion and debate and then we'll open it up to you all and take some questions and conversation from the audience. so i guess i want to start out by throwing a question out ere which is that there is this whole argument right now that we should not worry about the deficit in the short term, that it's not the most important problem and that it is not about to bite us in the short term, that we should worry about it in the long term. what i wanted to ask you is if

we imagine a country in which you got to be a benevolent december pit, i could see -- >> you're supposed to be on my team. >> i could see how we would do that. you've laid out ideas for reducing the deficit cap. but the way the political system works it's hard to cut the deficit. so the question is given the scale of the long term challenges we have, given the fact the more we wait, the more they build up and the smaller part smaller part of the population we have to focus them on. -- t dangerous to say >> so, i think what is interesting about the debate in washington is that we have actually been excellent. i would turn that on its head. if you look at the policymaking over the last several years, we

thatexcelled, not in ways is the most rational, but we have actually made real progress on deficit reduction. been making significant progress in some of the policymaking in economic growth, reducing unemployment, etc.. what is fascinating about the discussion in washington is the traditional notion deficit reduction is so hard and deficit is so easy has really been turned upside down. and, you know, i think that there is a common view that if said reduction always gets harder, you know, the longer you cut it off. what we are saying is, obviously, we have put out a lot of plans we believe were the right lands for long-term deficit reduction. we are acknowledging we are in

a political climate in which rational deficit reduction is very difficult because of the constraints of one party to the talks. we are saying we should not be holding hostage investments in the economy that are desperately needed to the search for a grand good buthat may be should not hurt us from actually acting now. i think that not doing deficit reduction right now is accurately described as chocolate. join the reduction later is not really spinach. ,hat i would argue is basically, three quick points.

i will circle back to what i started with. i wholly agree with neera's framing. deficit reduction amounts to 2.8 trillion over the next 10 years according to numbers. it wouldat this point, take another $900 billion over the next decade to stabilize the debt gdp. that is the goal we would agree upon in the long-term. in a functional congress, which we do not have, that is not that heavy a lift. i thought that teeing off of the framing is just right. agenda -- somehow an i do not mean your agenda, just let u.s. the question, to suggest it would be like sugar or chocolate to put off for and deficit reduction is, i think, the wrong frame.

fors much to chocolate what you have after you have been nourished. the economy is suffering from an absence of basic nutrition right now. the austerity in that it in the deficit reduction, in my view, has come to quickly thus far, is demonstrably hurting. it is what we all have agreed on. the reason why -- in the longer term, the reason it is not really spinach is once you achieve a more established growth rate, a bona fide the deficit relative the economy falls on its own if you implement the kinds of changes we need to implement. saying, if we did nothing, it would get all better. once we start growing in earnest, the changes we would

make are actually not that heavy a lift. the thing that drives the long-term buzz it -- budget deficit is twofold. one, a lack of adequate we have actually in slowingrogress the growth of health care costs. we do not know yet how much they will stick. we actually could and should take advantages of the savings of the ceo over the next 10 years. -- we should take advantage of that. we do not rush into long headed austerity type hair on fire big budget.y and the we have time to be more thoughtful. >> you had something i want to come back to, teasing into what

they really are. it is a version of church hills line about, i change my mind when you do. costsk the healthcare's are slow. we have reduction over 10 years to a combination of tax decreases pushed by obama. -- tax increases pushed by obama. we have had a lot of deficit reduction. the question is, a lot of people say, would it be a big deal if people had your view on ,hings and came out and said right now, the problem is not the deficit here the bigger problem is the state of the economy and the deficit is second. why not make that argument from your perspective and push the

deficit to the second-year? to accepti am happy georges characterization of deficit reduction as chocolate. if we could get that around, it would be good. comely, the deficit has down in the short term. i keep thinking we have been the grand case on bargain side that the short-term deficit is not the problem. what we need to do from a grand bargain point of view is attacked the structural deficit, which is the long-term mismatch between spending programs and revenues, and you need to put those things on the table. in the short term the deficit is coming down. it is looking much better. i do not see the -- that as a

reason to postpone trying to address the structural deficit, which i have always viewed as the real problem. i don't think that problem has been solved. the numbers will switch every now and again. that looks a little the other. with the health care costs and some of the changes that have been made here in i look at the good news and say, you look at the last projections, you have had declining health care costs, rising revenues, the debt looks relatively stable. we have all these caps on congressional area spending. and yet, we still have an outlook that is unsustainable. the debt begins to go up again toward the end of that time. walk and chewn gum at the same time. the only way you can get at an --eement that might do some the sort of long-term structural issues some of us want to get at, combined with some short to thealth that help

economy, is a grand bargain. i do not see being able to address those things that really. >> let me start by saying i recently decided i would try to see if i could have these green juices, kale and spinach juice, for breakfast. i am part of the your spinach juice caucus. it is good. the kale drinks are not as discussing -- disgusting as you'd think. >> they put fruit into it. >> right. a little bit of sugar along with the spinach and we have a solution. let me start by saying the things i think we all agree on. i think there have been real fiscal progress in the last couple years and that is great news. we also probably all agree it has primarily been not in the right way.

a lot of the changes we have done through discretionary caps, the sequester now is not the spending area of the budget you want to focus on. it is not where the problems are. i would say the rate -- the way we raised revenue is not the best way to go at generating revenue. that is one thing we would say, so far, not actually the ones we would want to have accomplished. the big parts of the budget that still need to be addressed have not been. we would also agree the problem is not solved. if you look at what the fiscal objective is, what you want to do is put the debt on a downward path so it is not going after than the economy. we stabilized it so it is coming down in a couple years and then it will go back up. there is more to do. i think we would all agree

austerity, meaning significant deficit reduction right now in the short term, not the right thing for the economy. i believe we all think that. i believe that. focusing on deficit reduction now. that is not the problem. the future, the medium-term and the long-term. where we might disagree is, how important is it to start working on those issues right away i to dohat you do not need is put deficit reduction in place and cut the deficit right now. it may be coming down too quickly. you need to make the decisions as quickly as possible, continuing delay of how we would deal with continuing problem of health care costs. health care is still going after than the economy. how will we deal with the aging of the baby boom? will continue to try to halt figuring out how to deal with those challenges. i think we need to work on those things as quickly as

possible. i am sure there is disagreement on the perfect budget solution. from where i stand, there is none. we need to get working on these trends as quick as possible and not have to sides fighting for years and years about, "i want this spending package" and move toward the compromising feature of it. you had said it would be a big came out and said deficit reduction is not a priority right now. right after the economic crisis, i would get calls and i am sure bob would all the time, saying, the deficit is one foot in the truth was, at the time, the deficit was the result of a huge economic recession. the fact that we needed to take real measures to deal with that. there were times, but depending on where you are in the business cycle, that you want big deficits.

that is one of the reasons the deficit was so big and why it is coming down now. there is a structural deficit problem we face in this country. between ource spending and revenue. . hear many arguments not that political discourse of these being an excuse for , even delaying those though you can face those in gradually. you want to make the decisions as quickly as possible and bring stability of knowing how we will save the economy as quickly as possible. >> i wanted to respond to a few points. on the issue of health care costs, it is the case health care costs in the last few years have been moderately higher than

inflation. we are at a 50 year low in terms of the numbers coming in. there areakers, variables in the distractions and and we should not assume health care costs will stay at this level. the question i think we have to grapple is, neither should we assume they will automatically go back up. there are variables on both sides. health care costs could come in lower than projections. the idea of taking this time putting in place policies that will lock in decisions for generations, seems to me something you may want to think about on both ends. having said that, we have proposed a lot of reforms of health care that address trying to move over the long term. middle and low

income seniors have borne a lot of urgency during this recession. middle and low income people have borne a lot of burdens in the last few years. putting greater burdens on them is a big question for us. to the second point, we absolutely agree an optimum situation is long-term -- having a plan. we all broadly agree. we should have a long-term deficit reduction plan that invests in the economy right now. but i think, washington has really -- it is assessing with deficit reduction. we have to acknowledge we have some responsibility for the high

unemployment we have right now. policy in washington has not beam onused as a laser economic growth, on what the federal government can do to address unemployment. political actors on all sides have been much more focused. if you look at the house of representatives, they very little talk about long-term unemployment, economic growth member -- measures that would address what people have right now. the point we are making is, essentially, we all have some responsibilities. washington can do so many things. we tried to get a grand bargain. it has not happened. they have been intransigent on the issue of revenues. you could have a small term deal that works over the next couple of years to substitute

sequester. tot lays investments address unemployment, invest in infrastructure, the programs. these are ideas we put out. and that we should not hold around doing anything economic growth right now. unfortunately, it has room elusive. >> in an interview the president said he wants he to move away from the damaging framework in washington on the deficit. >> austerity. i bought on that. >> to what extent does he deserve blame? that would include the pivotal in the administration pivoted in the first term toward emphasizing stimulus to deficit. i would say, although it got less attention, the white house did not have to be in favor of

letting the temporary payrolls tough last. either in retrospect or even saying they should have known at the time, does the president deserves some of the blame or credit for the framework he now decries? >> that is where i want to jump in. thank you for asking. i think the answer is probably some. , for my taste, and i do not want to be unfair to anybody, but there is almost too much agreement up here -- on this point. of gdpget deficit, 10% in 2009, would be under three percent, by 2015. wase everybody up here alarmed about that and saying, the budget deficit is falling too quickly. that is not the way it has laid out in the real world. there has been strong forces

pushing policymakers toward deficit reduction way too soon. to hears discordant groups assigned to this panel for disagreement and say, we all disagree with that. >> where is the disagreement? --t are the policy meant measures? not be framework in the discussion? >> the policy you want to be focusing on are the ones that compounds savings over time that not only are we see on what kind of savings you are getting in the first 10 years, but the second are really important. something like the president put out recently, chained cpi, is the kind of policy that would make a lot of sense for the current economy erie and very little savings in the first year. the growth of the savings becomes very large at the end of the decade. careame is true of health

measures or anything would be doing helping to save social security. those are the kinds of policies that are the ones that would get at our main debt challenges. also, fit with our economic situation right now. it would do a lot in the long term. what you want to do is trade out the more damaging cuts from the sequester and replace some of the mandatory savings for that kind of policy. -- that issking, forward-looking. from there, we could have a good discussion with wild agreement. i think you are asking, somehow, the budget deficit went from 10% deficit -- gdp to three percent gdp. i believe i was not part of the problem. i was arguing against that, including when i was in the mid--- the administration. was the president part of the problem? the vivid in 2010 came too soon. >> one of the reasons why we did

the work we did to point out the changing deficit reduction is because we all have to while there was an overarching force of which is -- which is, that many organizations were a part of, that push for a massive deficit reduction, and the deficit picture was eight percent of gdp. washington policymakers adapted that because they heard these voices. they did not apparently hear any of the voices about immediate action to reduce the deficit to invest in the economy now. they did very little on that. what i'm trying to say is, the reality has changed. if you look at the ledger from

2010, one of their projections, deficit reduction and economic growth, deficit reduction, we are doing way better than we thought we would. economic growth, we are doing worse than we thought we would. projections would be at six percent unemployment. we are at 7.5. as policymakers, we say, if we have to believe in short term investments -- short-term economic growth, let's have ideas on that right now. the deficit picture has not changed. we are talking about chained cpi again. ,hanging investment out changing growth now, that will address the suffering people have right now? >> the short-term decrease in the deficit have come from the economy recovering not simply because of policy changes that took us -- rid of the budget.

some of the automatic stabilizers have reversed course and that is good. that sort of deficit reduction would always take place and that was not the result of policy changes. some of thee sequestration that has taken place in the last year is not good policy. it is not hugely responsible for the short term decline in the deficit. it is part of a longer. we had the payroll tax cut expire and the tax cut go up on upper income people. that has contributed to the smaller deficit this year. i do not think the sovereign debt sudden drop in the deficit is the result -- solely the toult of a relentless drive

cut spending. >> whether we have done enough work in the long-term. all of you would agree we have not. do you think the deficit has come down too quickly in the short-term? should it be higher than it is is today? >> not necessarily. it is still around four percent of gdp. it is normalizing as the economy begins to recover. question is, do you continue with policies like sequester. the things that are the investment. if you are going to make domestic investments, they will come from those programs. it will be increasingly difficult to do that. that is not good policy wise. the policy choices you make for deficit reduction is a good thing. >> what i hear them saying is, the deficit is coming down more than we forecast. economic growth is slower than forecast.

ratioployment population is worse than we thought and the decline in the deficit -- i guess i am interested if you agree. we have had an economic damaging amount of austerity over the last two years? setting aside long-term? amount we had the right of short-term deficit reduction so far? >> nobody knows what would have happened otherwise. if you look at the numbers and where deficit reduction has come, a big part of it has come from the economy performing better than we thought it would. the economy is not on track. growth is not what it should be. there are a whole lot of policies you should be dealing with. one of those is switching out the wrong kind of debt reduction in their for the right kind. i do think the sequester will start to have a bite on the economy -- part of high revenues was cap gains. people paying, sung in their

stocks because they knew tax rates would go up. there were these one-time infusions. temporary measures. it will start to become a problem in terms of economic growth on two sides. one is the sequester spending cuts are cutting out the public investment that exists. it will probably come too much too quickly. but the debt level, and one of cost about, it was dismissed so we do not need to worry about debt being a harm on the economy. debt reaches a point where it is a drag on the economy. we do not know where that is. >> we do not need that is for that. >>) no surprise you have too much debt. worried about that. what makes sense to think about, what we know about how to grow the economy echo we need to be

looking at private investments, public investments, raising our revenue in a way that is good as possible for the economy. we are not doing very well on three of those four. we could be doing better on private investments. there is a whole congress of whichic growth strategy sensible debt reduction has to be a part of. and >> i quite strongly disagree. >> you have been looking for that. [laughter] >> too much cable television. , becausen of respect we know this very well and have been working for a long time, but on the near-term economy, i think you had it backwards. said the economy has done better than we expected. in fact, pretty much every forecast, almost every fellow

reserve forecast has been marked down because the economy continues to be worse than we expected. currently, gdp growth tom a euro of the year, is barely two percent. that is basically what we call trend growth. we do not have second-quarter yet. the forecast coming in around one percent. qwest revenues came in higher than expected there it it was not a policy. qwest that is the second when i wanted to disagree with. that istrously, and not a function of a faster growing economy. i grant you it is part of it. it would be good to know how much. in my first comment, i talked about $2.8 trillion in deficit savings.

the tax increase deal they were talking about. the fiscal cliff. holiday, the expiration of the payroll tax. we have engaged in significant economic policy to bring the budget down. economic growth is part of it. it has been deeply subpar. to say, i'm ok with the demos and reduction we have as of because the economy is ok seems to be really missing a lot of the pain going on out there. >> on the one point that was that if our debt to gdp ratio grows out of flat, that would have a big challenge for economic growth. , but let'sgree assume that is true. what i find frustrating about the current debate is, we have an economic growth spurt now without a long-term talent.

discussionwhole about ensuring that we are focused on those long-term -- which i agree. we do not have rational but ladders. with eight which take a different course. it is frustrating to hear about potential challenges to economic , 20th 10 years, 15 years years, when we have real challenges right now. >> one of the things i noticed that your report is you basically said, we have focused a long time on trying to get a grand bargain, a deal big enough all at once. grandeport points out bargain loosened. i wish we could put in place a thick that would surpass at occasions and bring a lot of confidence. it does not seem the political environment will be able to, but

that. unrealistic. is your proposal being what we would do getting rid of a couple of years of sequester. i think it is like three quarters of it would be from revenue. whether you think that is the right policy or not, that will not happen, either. one of the questions is, what could we possibly get done when we should be trying to work on these issues and there will be moments when we are working on these issues. about politically what can get done. i am not sure your report lays out something that has much of a chance of going forward. qwest let me try to respond. we put forward a proposal that essentially says we could have a smaller deal. our view is to have roughly 50% revenue. 50% of revenue. we accept her for it. we count the fiscal cliff as

part of the sequester. but i think what we are saying is, when you get to a reasonable amount, one you're talking about a couple hundred billion dollars, that seems much more reasonable on both sides. there is spending we could have, and revenue that can make up for that. i think we could undo these damaging sequester cuts for a time until we get to what is really hurting google right now -- people right now. 700,000 jobs are predicted to be impacted. we are simply saying, it seems to me reasonable to expect the house of representatives that cannot do 800 billion dollars of revenue can do $100 billion of revenue.

there are ideas circulating now that make that a reasonable amount of money. >> i am not sure you both use the phrase. you talk about the forces that create the deficit framework. can you put meat on the bone and tell us what are the political -- feel free to blame the media. [laughter] >> you always women you blame the media? qwest probably true, and lawyers. -- >> probably true, and lawyers. >> can i start? the facts were worse. when the debate started our having long-term

deficit reduction, etc., the predictions of where we would be were far worse. , it was reasonable for actors to say, this is a significant challenge. we are not arguing there is a crazy of lines of people trying to keep growth down. that was a reasonable factor. our point is right now, the world has changed. it seems to me policymakers throughout the spectrum should recognize the change and adopted. the issue is, where are people right now? arguing fory austerity over everything else right now? that is what we are concerned about. i want to do-- more finger-pointing. great.t totally >> it is funny i am the nice person. >> i know. i think neera is right.

the other day there is a 10 year budget forecasts, a boring science fiction. that is well put. we allnear-term, expected the budget deficit to get really big. i was there working through the administration when i was happening. right question is is not, is it it large in 2008, 2009, 2010 is it big enough to offset the magnitude of the sector -- of the private sector demand contraction. the forces that have aligned who are actually quite a bit less interested in actual deficit reduction menu would really believe. there are more people who want to just really shrink government. they want to get rid of social

insurance because they ideologically oppose it. they do not like the safety net. if you give them the opportunity to cut medicare costs like the president did in the election, they attack him for that. , when you write down the numbers, they are as serious as they say. it is the republican small government, overall, regardless of what that actually means in the long term, that that has adopted deficit reduction as an ideology. they havey contributed to a level of urgency in near-term deficit reduction and it is quite different than the views they espouse. perhaps it is the communication thing. >> let's hear more about that. what do you mean? >> say more about what? >> about how you think -- >> how their groups --

what you're saying is their groups have contributed to an over emphasis. >> let's clarify that. our focus has been on medium and long-term. meant when iat i said, maybe it is a communication thing. every time there is a proposal for reducing the deficit, i get an e-mail from your guys that say, it is not going far enough. including the president's speech the other day, where i -- that-mail saying, was not a proposal to reduce the deficit. the criticismying was i wish the president had addressed reducing the deficit. i stand by my assertion. every time there is a proposal to do deficit reduction, your group has to do more.

you argued to do it in the medium. what i hear you saying today makes sense to me. >> it is the failure of the media not to interpret us properly. ,> you make the argument there which is that it is the only message that comes out, whether weis from a media or -- need to pay attention to the deficit. that has more impact on the debate than the timing of the thing. it is difficult to distinguish between short-term and long-term. people here deficit and they do not necessarily look at short- term and long-term stuff. that is one of the vicissitudes of discussing the whole issue. thatet the distinction they are more interested in a sustainable shrinking government. to the, what back

do we do about it? the political frustration i have, and this is part of what is going on, even with the it is not soour, much a resetting as i see it, as just swapping trenches. you go from one trench warfare to another, so we have the sort of trench warfare on the proposal that cip has put out. are talking past each other and not with each other. i think, if we want to have the about economic growth, let's say we were to , things have changed, so let's talk about a year, -- growth here, but let's also talk about deficit.

i think you can do both. you have to do both. is some sort of process to get us out of the trenches. we can have trench warfare over the medium-term and overgrowth in the short term. i would like to regular order on the budget, one way to do it you have got a house budget, a senate budget. there is not a mechanism right make the sortould wetrade-off and say, maybe should except higher spending on things that have a high potential for growth in the short term. to the would you say norm argument, which is that it is not about making sure barack obama and john boehner like each other, i think what he would argue if he were here is that

one party has gone much further from the center than the other party. those of us in the media and ad groups that try not to take a side have a hard time with that. it is not about regular order. is it -- it is about the fact barack obama will cut medical security. what do you make of that? class that is a problem. that is a problem. [laughter] i think you hand, need to probe for the possibilities -- the senate republicans for example, you have folks there that would make a deal. i would like to see something going on there. that there was a budget negotiation to test the proposition. everybody recognizes at some

point you will have to be part of the solution. that's i think the policy for this are obviously terrible. partisan and it is difficult to work on these issues together. i do think when you asked your question though, you have to remember what we have done so far is we cut domestic discretionary, and we raised revenues. but we have not done is dealt with medicare and social security. the part of your question the one party will not raise revenues, we have done revenues. what we have not done is entitlement reform. for this party -- for this panel to the balanced, you would have wanted to invite some of the far right to make this case. they would say, we have done everything but entitlement reform. a great example of how this conversation gets skewed. one of the reasons i we have medicare, we have taken a lot of money out of medicare.

we have a lot of reform in medicare. it is just not counted. >> it went back into a new program. >> there is deficit reduction at the end of that. -- we areing money taking money -- the affordable care act itself was a deficit reduction strategy. >> particularly in the long- term. one of the been soes that has disconcerting in why we are concerned overall is because if you look at what happened, the entire conversation does move right from the framework. the president is willing to put .orward a balanced plan he put forward the plan. by a house

republican caucus that moved farther to the right. the paul ryan budget moved further to the right than it had in the previous sector. one of the challenges is simpson-bowles came out. less revenue in response. is that, whileen the republican party has moved, what matters for us is the conversation on deficit reduction has moved farther and farther right, as measured by the advocates as well as the president himself. >> even with the year-end stuff, over the great fight, bill clinton has one. >> is what i want to say. 82% of bush tax cuts were locked in by the fiscal cliff deal.

>> i am talking about high and rates. >> yes. do not know if you are suggesting the spirit i would be interested in your response. i do not think we are near done on the revenue side. stressing we have cut 2.8 million over 10 already. if you look at the policy part, 70% has been spending cut -- cuts. certainly, 70 -- 30 sounds unbalanced. having locked in 80% of the bush tax cut is not mean we are done. -- the, i am not sure president in his budget that , 400h -- has elaborated billion dollars in medicaid and medicare cuts and $200 billion in other cuts.

the analysishink you describe sounds accurate to me. >> should he be out pushing the budget? is a lot of good stuff in the presence question. should he be out pushing the budget? >> he has his offer on the table. >> this is the issue of the senate. they are looking for a counteroffer. i've you have got to use the bully pulpit to rally putt -- budget support. >> are you saying rally the public? i think that would be very cognitively dissonant from where the general public is. i do not think it wants to hear the president go out and say, it is long-term, it is down the road, we have an accelerated now, break later, i get that. you said it some other way earlier.

what people want, need, and should hear from the president is his plan to do something about an economic recession not official at this link. >> i think he can feel the pain on that. his budget about proposal. people want to hear about that. >> can i ask what we are trying to accomplish? what does it matter? >> they have not done a counteroffer. we have is there are many reasonable voices in the senate. it is hard to move a bill in the senate. it is hard to get a minority leader in the senate to agree to remove -- to move the bill when he knows that house republicans will kill it.

we are in the world of political constraint. the question is, how do we break out of it? >> you have all the problems, whether he is pushing the budget for doing what he is doing. he is talking about the need to do a better deal for the middle class. you have political problems back in washington a matter what you are doing. if he involves an engagement with the republicans, there is more of a chance of getting something done. i think, hitting a resident court with the public. again, if we are just resetting into different trenches, republicans will not be receptive to the president speech. but, if there is some sort of acknowledgment of the issues they have the budget, i think

there will be more of a -- can i cut to the chase? a lot of what you are saying is resident to me. it seems to me we are stuck in the trenches because of republican intransigence he on revenues. help me figure this out. i asked earnestly. , as we may have, that a two-year deal is all we can hope for and it would replace the sequester with an equal amount of deficit savings. collectively agreed? >> this is a hypothetical. >> if we cannot get a grand bargain, you said earlier -- >> i do not want to use the sequester to create another sgr. we should not limp from one crisis to the other. of- at least replace part the sequester. >> how do we get out of our trenches without revenue?

is it possible? >> political trenches? >> he used the medical or -- metaphor, and i think you use the word trenches. >> new revenue has to be part of it. no doubt. >> as long as one side says, i will not do any revenues, i guess i do not see how you are not stuck in your trenches) think the fiscal cliff deal is different from the others because of that ticking time bomb? or do you think it signaled a weakening? >> right after president obama one, john boehner made a speech that he understood change in revenues were on the table. ,hat i a with the fiscal cliff it was a terribly botched moment where we could have done a much better, where we could have ine longer-term savings place. we could have raised a lot more revenues than we did by doing it the right way.

we could've had the kinds of savings right to deal with the budget. republicans have always been pretty clear on this it comes to two things. it comes along with real structural reforms and entitlement programs and it comes through raising them through tax reform instead of tax rate. the fight on rates and reforms deferred attention on an all- around better deal. fascinatinge things about this today is how skewed it becomes. if you talk to the american people, their wishes were represented in political discourse more perfectly than it is now in washington. in part because of the recession we went to. people were much more open to tax increases for wealthy because wealthy taxes had

declined because of the bush tax cuts. also, the issue entitlement reforms. --do believe you can have for example in medicare. it is not that republicans want to entitlement reform. theirnot gloss over demands, beneficiary cuts in medicare. what is estimating about the discourse is that is the thing people are anxious about losing things they, losing have benefited from. the challenge we have in the medicare debate, what i find so frustrating about the debate is that so little of the debate actually addresses the fact things have seriously altered over the last three years.

yet, we considered -- continue to have a conversation as if it were the same as it was five years ago when inflation was at a higher level. if we are at a place where this is where the assumptions go forward, or even lower because the affordable care act is working effectively, etc., the whole debate about these entitlements would radically alter, as well. we are willing to say, let's put all the ideas in place now and make them permanent even though we do not know if the world will be better or worse. it would be more helpful in this discussion, because so much is focused on how you, and politics ins i and washington is terrible and i. >> if you want to have a

republican is common to the interested to the session. whether you want it done democratic or is kind of life, there is a legitimate concern about the immediate and long- term challenges and in athens and is reflected in every independent agency. there's also a a in the last 10 to deal with the stock and it is not clearly cap. solution toic implement in town and i and you and i played out on a you brought a couple of times as a that changed, i was in as and around her economic crisis and in these word to work as a and just to buy health care costs as sedition and in the end,

is is coming down, you andight as and as heyou shall way in i think is in in the same structure as can do asnd as you they are still going in the and is in their filename is working and is in him is and i want toyou make sure you are in our flesh you briefly one in the low is

an and medicare and social hulu areely and now you and i the democrats are right to and or would you andake more sense to say, in education and you and you are actually long, minus changes as you and -- andso, there is challenges are currently have seen in an and is not in an and shall in seen. in him --

we have seen change in healthcare expenditures by the federal government. because of some of these issues. as a product of medical inflation, that is a structural change. what is happening with medicare inflation has a huge, profound impact going forward. the criticism i have on proposals like raising medicare , is that my view simply shifts cost. it lowers costs for the federal government. for employers and

individuals. as a policy matter, supporting makes us of cuts spend more. it makes very little sense. the big issue, the big concern i comes from, if we have learned anything in the last few years, it is that clinical forces currently aligned in washington are not going to take medicare savings or social security and invest them in pre-k. done isg we have really kill all the investments that matter to competitiveness, like education, research and investment, in order to preserve tax cuts. if i could, with a magical world in which we had a rational budget, i would make a variety of different outcomes. this construct is so far removed from the political

world we live in, it does not make sense as an option. >> i am more optimistic there is as i recall the numbers, someone should check, i think the cbo forecast over the next 10 years for medicare and come downogether has by $900 billion over the past six months. apart from earlier -- is that .ight? ok it is a big number. hundreds of billions. the water has done a lot of writing on this. is, iwer to the question social -- clay minor changes to social security,

fiscal policy over the five-year forecast, with medicare, i largely agree with neera. where i would disagree is, you said something like, it has undergone a structural change. it may be has. class we do not know. not know.e do class we cannot be sure yet. -- >> we cannot be sure yet.

early childhood education, everybody agree, is a good thing. that every child should have optimal opportunity to get the very best education that they can get. i don't know anybody who disagrees with that. but making it happen, making it

real, making it work, becomes the challenge. or there might be another issue. the things that schools can do, if we're talking specifically about the question of violence, there is anti-bullying legislation that has been introduced as a matter of fact, sheila jackson lee as well as myself have bills calling for curriculum to be developed that actually help to teach young people that there's a way to resolve conflict without resorting to violence. that's part of the long road home. but you have to take it and make use of it. then we have all of these disparities that we know exist. we've been fighting them since -- since nater. turner. denmark beasley. we're aware. not only are we aware, but the rest of society is aware. how do you generate the leverage that you need to bring about the

change that you are seeking. efforts are under way. every day. struggle is ongoing every day. and we meet with efforts of success. don't ever think success never comes or much stays the same. so the struggle goes on. we'll be struggling for years and years to reach the level of equality -- equal justice, equal protection, under the law. there is no quick and and dirty solutions.

there are no easy answers. there are no panaceas. so there's no point to delusion ourselves into believing that there is. struggle, strife, and pain are the prerequisites for change. always has been, always will be. [ applause ] >> i have probably close to 100 questions here and i've read through most of them. there are some amazing questions here. in the interest of time, it's friday evening. i want to be respectful of your time, certainly. what i'd ask the members of congress, do you have a question? please, this is -- >> can you hear me? i want to know from the audience, someone asked what can we do -- this was an emergency summit.

and i really want to know the answer to when someone said should we bring military to the blocks? what do people -- i want to know what you think? should we bring a state police or -- i'm not saying i'm for it one way or the other. but i want to know what you think. >> quick show of hands. >> people are afraid to sit on the porch or go to the store or send their kids to school, then what is going to make you unafraid? is it more visibility or what -- that's what i want to nope.-- to know. >> so can i ask a question, congresswoman, in the interest of time, would you all commit to sticking around and talking to folks one-on-one afterwards for a little bit. >> for a little bit. >> she has to catch a plane. >> please. >> she has to catch a plane. is my mic, can you hear me? let me build on what my members have said. again, let me indicate that your members are here, congressional black caucus members are here. you saw many of them today.

some of us flew in late. just so we could be part of caring about what is happening to our young people. we have something called the justice working group of the congressional black caucus. your members are a member of it. and my promise to you is that i said something about gun trafficking. we have talked around it in washington. well, there is something to all of these guns being around. it's not the ones that yue have in your home that you're -- you know, no one is trying to break the second amendment. but the ease of getting guns is because you can't seem to get people to understand so we have an agenda. universal background checks. banning these assault weapons. passing anti-bullying and prevention -- meaning that the resources to intervene just like second chance worked, then getting people a second chance with a job. the list of gun laws that many of us have introduced, simple

ones, and, yes, dealing with some of the laws that did not work in sanford, florida, dealing with stand your ground. dealing with the self-defense that winds up people who are wanting to not do right can use to avoid prosecution. one thing we have to concede is we're not getting killed with a fist. we're getting killed with guns in the wrong hands and bullets. and you have to ask yourself, where are these coming from. so the justice working group and the congressional black caucus, we're hearing all of that, is going to ask the hard questions, produce legislation, and also seek the resources because there's nothing wrong as asking as bobby has said, let children

be the priority on the federal level that deals with education and summer jobs. and i will leave to the expert about how the gangs are moving around, whether it's turf, whether it's drugs. whether it's one gang against another. but we do know people are dying. and i think we need to leave here with the burden of the members who put together an omnibus, an emergency plan and funding. and i can tell you no one up here is a wallflower. and that this will be heard next week loudly and clearly. and the good news is -- let me say the good news -- in our churches -- it's the good news coming. we've got some brilliant, brilliant strategists coming out of the diverse community. the african, latino community. we've got brilliant folk.

but they need to be heard. it's got to be, "we too, are america." whether they come with their plan, whether it's naacp, the urban league, guys, you have to know, that whatever the national label, these folk are working hard. i'm not going to bring up the voting rights act. but that's on our plate. that's got to deal with how we've got people who are representing that's going to be interested in getting money to put our children first. so if you work with us to get an anti-violence agenda by your voices and working with your members, you can be assured that the congressional black caucus, all of the members that came, are going to take this back to washington. they're not going to talk to ourselves. we're going to talk to the idea of a heard, listened to, and acted upon agenda. the great society in the 1960s,

that's old terminology. we're going to come up with something great that's going to deal with our children based upon what i know my members heard and what i heel take ape away. what i will take but don't forget, we came here about gun violence and don't let anybody say we didn't hear what we need to do about preventing gun violence and serving the lives of -- saving the lives of our children. so i've gotten -- i heard you. i've got folks to work with. and i thank fem -- them for working with me today. >> congressmen, do you want to leave with closing words. >> yeah, i would. thank you so much. first of all, i want to just say to those who have been here, whatever time you've been here, sheila i really thank you for coming to chicago for this. and maxine and corinne and sandra, they come from their districts and i know how troubling it is to come to

another city. so i really appreciate you for coming and maxine and others for coming. danny and robin and -- i really appreciate the opportunity to work with them. and i appreciate -- let me bring one in here. those who were here, had to leave, those who came in later, those who participated in the brain trust -- in the breakouts, this has been an historic day, a remarkable day. not only for the conversations inside the breakout sessions, but the conversations in the cafeteria, the conversations on the sidewalk, in the hallways, a lot of conversations going on around this particular issue. and when we as a community start

having conversations about the problems and we are well on our way to solving the problems. it's when we don't talk to each other, that's when the problems become more magnified and intense. let me leave you one thought. one thought that i have is that i don't know how many of you here have volunteered to you to really spend any time working in your church, in your schools, on your block, in your -- on these issues with these young people. i mean, the young people need the love and the support and the time of the adults. i tell the story about young people two years ago was in our office.

they come in every year. one particular group. they had been in washington six days. and this was the internet trip to washington. and they came in to see their congressman and i said for 45 minutes, they were asking me questions about legislation and my position on legislation and i -- we went through that very nice thoughtful conversation, taking questions, then in the end of it, i asked them -- i now have two questions i want to ask you. what is your biggest problem? these children were from hirsch high school and from simeon and king. you know, a cross section. i said what is your biggest problem. this is just after damian. he said our biggest problem is fear. fear is our biggest problem. fear of being shot. fear of being stabbed, fear of being clubbed. fear is our biggest problem. to school, from school, walking to the store.

our biggest problem is fear. stunned me. that we have in our community, our neighbors, our neighbors' children, our young people's major problem is fear. i said, okay. i said to myself, okay, well what can we as adults do about it? and they said, give us some of your time. [applause] they didn't ask for more money. they didn't ask for a wrench. they didn't ask for laws to be passed. they didn't ask for president obama to create a commission. they said, give us more of your time. if we would invest more of our time with these young people, we could stop this violence. [applause]

number one. the second thought that i had is how do we -- this is a national movement. it's not just a -- it's -- chicago is just the epicenter of it. it really is going across some of these -- i don't know where these tv cameras are, but some people in philadelphia are going to see and hear about this, read about this and some people in oakland, california going to hear and read about this. and they're going to wander, well, what are they doing in chicago? how is chicago working this situation out? one thing that i don't think we take a lot of time and effort -- we've got 30 days before the national march on washington -- the date that it took place, august 28. we have one month. today is the 27th? so we have one month.

>> 26th? >> 26th. okay, two days, all right. why, if you and i can agree on this, why are we working over the next 30 days, e-mailing, texting, sending facebook communicating. and ask for a national day of nonviolence in our communities on august 28? [applause] now, i'm -- what i'm not saying that that's going to solve the problems. but just the process of going through that will make a difference in some communities. if you organized your church around just that simple idea -- one day, just that simple idea, organize your block, organize your school, organize -- give them to these communities. one day, a national day of

nonviolence, and let's declare it and let's just make that happen. no humans on that day calling a cease-fire on that day and if we do it, then, then we'll be empowering ourselves to take more definitive action. >> thank you for that. congressman kelly? take us home? >> once again, injust want to appreciate all of you that have taken the time to come. we know we put this together in emergency fashion. and not a lot of notice and i'm sure a lot of this is preaching to the choir. but the choir needs reminding, practicing, rehearsing. we're asking the choir to get more singers. we need a community. we need a community to get involved and it's an old proverb but it's going to take a village, going to take us and

you who represent many different entities. thank you so much again. and i'm passionate about this. your zip code should not determine your opportunity. and i just want to make sure as someone said, we had this meeting 10 years ago. well, 10 years from now, i don't want us to be having this meeting. thank you. >> if i could -- >> please -- >> the level of corporation has been incredible. we've had the governor of our state. we've had the mayor of our city. we've had several local elected officials. we've had community groups and organizationings. we've had faith leaders. and i want to thank all of those who have combined to make everybody more productive weekend. i want to thank all of our staffs and the staff of chicago state university for their

engagement, their involvement, their cooperation. i want to thank the congressional black caucus staff, each of the staffs here in chicago and washington. last night there was a commitment that people would continue to convene themselves here at chicago state university. that there will be continuous discussions, continuous meetings , continuous organizations, and quite frankly, it takes all of

that in order to make something happen. it's been very productive. i know people are going to ask, hat happened as a result? what happens as a result remains the screen. -- remains to be seen. quite frankly, the answer to that becomes a question that each one of us will answer. i never will forget growing up, we thought but were wise little boys. there was a man in town called uncle joe. the idea was if we could ask uncle joe a question he didn't know the answer, then we were smart. we caught ourselves a mockingbird. we figured he would know we had

a mockingbird. but then we would ask him, if the bird was alive or dead. if uncle joe that the bird was alive, we would squeeze it and kill it. open our hands and everybody could see that he was wrong. if he said the bird was dead, we would simply open our hands and the bird would fly away. so we ran to him with our plan. we says, uncle joe, we want to ask you something. do you know what we've got in our hands? so he looked and said, little boy, in your hand is a mockingbird. we kind of punched each other and said, well, we got him now. we said, uncle joe, can you tell us if the bird is alive or dead?

uncle joe actled like he was about to answer. then he looked at the two of us and he said, little boys -- the answer to that is in your hands. the success of this weekend summit, and its success is really in all of our hands as we leave based upon what we do. we thank you for coming. >> that is a beautiful way to end this inspiring evening. i do want to -- i have one piece of housekeeping here. these incredible people don't stop. tomorrow, 9:00 a.m. at kennedy king college, there is the congressional black caucus presents the health brain trust of making good health my reality. congress people will be there at

9:00 a.m. a town hall on health at kennedy king college. i would say this, i want to thank congresswoman sheila jackson-lee, congressman rush, congressman david kelly, and congresswoman corinne brown who had to leave here. but most important dlip as congressman davis said, i thank you all for being here in the spirit of congressman rush and mr. davis' childhood story -- on august 28, he asked us would we commit to a day of nonviolence in the city of chicago and across this nation. and as congresswoman kelly said -- sometimes if you were preaching to the choir. i think we know the answer to that question. but in that spirit and leading us in a celebration of positivity to the end of the evening, if you would commit to

that day and every day, would you please stand up. let's have a safe evening this evening on friday. god bless the city of chicago and god bless these united states of america. thank you so much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> coming up, a conversation on the effect that this it reduction has on the u.s. economy. on this morning's "washington will talk to the

former head of the federal deposit insurance compensation -- corporation sheila bair about monitoring the financial industry. discuss with the sunlight foundation lobbying and fundraising. that hurts it of and :00 a.m. thatrn here on the span -- starts on 7:00 a.m. eastern here on c-span. >> they serve as a window into the past on what was going on at any given women time in our past history. if you look at a first lady's life, you get a view of what is going on with women. the other thing i find very interesting from a women's history standpoint is that it is the conjunction of the public and private lives of women, which is a topic that many scholars are very interested in. i think first ladies epitomize the coming together of the

public and the private life in an individual. >> our original series examines the public and private lives of first ladies and their influence on the presidency. watch the encore presentation from martha washington to ida mckinley weeknights starting at 9:00 eastern on c-span. a conversation on the federal deficit, federal spending, and the u.s. economy. we will hear from jared bernstein, who served as the chief economist or vice president joe biden, and robert bixby of the concord coalition, and the center for american progress hosted this 90 minute discussion. >> good afternoon. thank you very much for joining us. michael linden. i'm the managing director for economic policy at the center for american progress. i want to thank you all and

welcome you to cap today. years, thet three economic policy debate here in washington has been dominated by one central issue, the federal budget. in 2010, estimate suggested that publicly held that was on track by 2023,s 100% of gdp well on its way to levels unheard of in modern american history. this alarming trend prompted many people in washington, including the center for american progress, to offer a variety of lse solutions to bring the federal -- policy solutions to bring the federal budget on a sustainable course. today the budget picture look significantly different. projections now have the debt declining slowly for the next five years before creeping upwards again after 2018, ending up in 2023 at about the same levels where it is today. this fall, washington is likely to be consumed with thoughts of deficit and debt and spending

and taxes. before october 1, congress will have to figure out a way to enact basic government on the measures for the next fiscal year to keep the government open , and sometime in october or november, we may find ourselves again in a fight over the debt ceiling. how we should approach these issues and how they fit into larger economic pressures of unemployment, inequality, and economic mobility depends substantially on what we think the improving budget projections mean. realities, aret they knew, is one question, and should deficit reduction still take center stage? as the deficit reduction we have accomplished helped or hurt to date? how do we move forward to address the nation significant economic challenges? and likely disagree about some of these questions, we are really excited and honored to have our disfigured -- distinguished panel.

order, we have jared bernstein, the senior fellow at the center on budget and policy priorities. from 2009-two thousand 11, he served as the chief economist and advisor to the vice president. executive director of the white house task force on middle class. a member of president obama's economic team. obamato joining the administration, bernstein was the senior economist and director of living standards program at the economic policy institute. washington. robert bixby has been with the concord coalition since 1992 and has served as its executive director since 1999. bob was a member of the bipartisan caucus center for debt reduction task force, urges known as the rivlin-domenici commission. for joining congress, he practiced law and served as the chief staff attorney at the court of appeals in virginia. maya macguineas is the president of the committee -- of the committee for responsible

federal budget. she also served alongside bob as a member of the bipartisan policy center's debt reduction task force read -- force. she has worked on wall street and at "the washington post." presidenten is the and ceo of the center for american progress and counsel to the center of american progress action fund. she was one of the first senior staff members here when we opened our doors serving as senior vice president for domestic policy, but since then, she has served as the legislative director for senator clinton, as the policy director for senator clinton's presidential campaign, for the domestic policy director or president obama's campaign in 2008, and senior advisor for health reform at the department of health and human services. moderating today's panel will be david leonhardt. he is the chief of washington bureau at the "new york times"

company. he writes an economic column for the business section. he served as the staff writer for the "new york times magazine" and contributes to the economist blog -- economiz blog. prior to joining the times in 1999, he worked for "is this week" magazine -- "business week" magazine. let's welcome them to the stage. [applause] >> thank you, michael. thank you all for coming. we are not going to do opening statements. we are going to talk for a while here and have a little bit of a discussion and debate. then we will open it up to you all and take some questions, conversation from the audience. out by i want to start

throwing the question out there jared.ra and there is this argument that we should not worry about the deficit in the short term, it is not the most important problem, and that it is not about to bite us in the short-term. i guess what i wanted to ask you -- i will start with neera -- if a matching the country -- imagine a country where you can be a benevolent despot -- [laughter] >> you are supposed to be on my team. >> you have laid out all kinds of ideas for reducing the deficit, and we would have some faith you would do that. the way the political system works, it is hard to cut the deficit. the question is, given the scale of long-term challenges we have, given the fact that the more we wait, the more they build up, and the smaller part of the population we have to focus them

on, isn't it dangerous to say, more chocolate today, more spinach tomorrow? i think what has been interesting about the debate in washington is that we have actually been excellent at the spinach. i would turn that on its head. if you look at policymaking over haveast four years, we excelled at deficit reduction, not in ways that is the most rational, but we have actually made real progress on deficit reduction. we have not been making significant progress in terms of policymaking, and economic growth, reducing unemployment. what is fascinating about the discussion is that the traditional notion that deficit reduction is so hard and investment is so easy has really been turned upside down.

think that there is a common view that deficit reduction always gets harder, the longer you put it off. what we are saying is obviously we have put out a lot of plans that we believe are the right plans for long-term deficit reduction -- we are acknowledging that we are in a political climate in which rational deficit reduction seems very difficult because of the .onstraints of one party we are dealing with the world where the position of one political party, they do know revenues. that needs to change for us to take action. we are saying, we should not be holding hostage investments in the economy that are desperately needed to search for a grand

bargain that may be good in the abstract, but will hurt us right now. that not doing deficit reduction right now is not accurately described as , and doing deficit reduction later is not really spinach. basicallyld argue is three quick points -- i will circle back to what i started with -- first of all, i fully inee with the framing, and fact, deficit reduction so far, if you include interest savings, as amounted to $2.8 trillion over the next 10 years. in fact, at this point, it would take about another 900 billion dollars over the next decade to stabilize the debt as a share of gdp. that is a goal we all agree upon in the long-term. in a functional congress, which we do not have, that is not that heavy lift.

i thought the teeing up of the framing was just right. -- itgest that somehow was the way you asked the question -- to suggest that it would be kind of like sugar or chocolate to put off current deficit reduction is the wrong you trust would you have after you have been nourished. frankly, our economy is suffering from an absence of basic nutrition right now. the austrian -- austerity that n the deficit reduction has come to quickly thus far, it is demonstrably hurting economic growth in the near term. that is something we have all agreed on. -- andy, the reason why the longer term, the reason it is not really spinach is because once you achieve a more established growth rate, a bona fide recovery, we would all

recognize as a real genuine economy -- recovery, the deficit relative to the economy falls on its own if you implement some of the kinds of changes that i think we need to implement over the longer term. i'm not saying, if you did not do anything, we would get better. once we start growing again in earnest, the changes we need to make are not that heavy lift. a quick point -- the thing that drives the long-term budget deficit is twofold. one, a lack of adequate revenues. the other is pressure from health care costs. we have actually made real progress in slowing the growth of health care costs, but we do not know yet how much they are going to stick. we actually could and should take advantage of the savings, about $900 billion, according to cbo.

that is the savings from slowing growing -- slower health care costs. we should take advantage of that so we do not rush into wrongheaded austerity-type hair fire, emergencies. we have time to be more thoughtful. >> you hit something i want to come back to. which is teasing what the real differences are among people on the panel. i want to come over here on my thoughts. if i were to take a version of what they were saying and form it is a question, it is a version of churchill's line about, i change my mind when the facts change -- what do you do, sir? healthcare costs are slowing. people talk about, we need $4 trillion in deficit reduction. through a combination of tax increases and spending cuts. >> assuming sequester. >> which at this point, it is

there. we have a lot of deficit reduction. the question -- i will start with bob on the and -- a lot of people say, boy, would it be a big deal if people let the two of you came out and said, right now the problem isn't the deficit. the bigger problem is the state of the economy and the deficit is second. why not make that argument from your perspective and pushed the deficit to the secondary? -- and pushed the deficit to the secondary -- push the deficit to the secondary? jurist appy to accept condition deficit reduction as chocolate. i think the things that haven't changed so much -- deficit hasn't changed so much -- we have been making the case on the grand bargain side that the short-term deficit is not the problem. what we need to do from a grand bargain point of view is attacked the structural deficit,

which is the long-term mismanagement between spending programs and revenues, and you need to put those things on the table. agree that in the short- -- thehe short-term deficit is coming down. it is looking much better. i do not see that as a reason to thatone trying to address structural deficit, which i have always viewed as the real problem. i do not think that that problem has been solved. numbers are going to switch every now and then. it looks a little better with the healthcare costs and some changes being made. i look at the good news and say, ok, you look at the last cbo projections, you've had declining health care costs, rising revenues, the debt looks stable over the next 10 years, all of these caps on discretionary spending. have an outlook

that is unsustainable, at least the debt begins to go up again towards the end of that time. walk and chewn gum at the same time. in fact, i think the only way you can get at an agreement that might do this sort of long-term structural issues that some of us want to get at, combined with some short-term help to the economy, is through a grand bargain. i do not see being able to address those things separately. start by saying, i just recently decided i would try to go on a mini health kick to see -- if you have seen these then juices, i realized irony that i'm part of the eat your spinach caucus could i have spinach for breakfast. it is good. they they are not as disgusting as you think. [laughter] >> they slip fruit into it. >> they are kind of tasty.

>> we would be for that. >> a little bit of sugar along with your spinach. there you have the solution. --e things we all agree on certainly there has been real fiscal progress in the past couple of years. that is great news. i think we also agreed that it is primarily been -- has primarily been not in the right ways. some of the changes we have done through discretionary caps, which are not the problem areas in the budget, the sequester now , that is not the spending area of the budget you want to focus on. that is not where the problems are. i'm not sure how much you would agree with this, but i would say the way we raise revenues is increasing tax rates -- not the best way at going about generating revenues. so far, the accomplishments of deficit reduction, not the ones we would want to have accomplished. the big parts have not been addressed.

i think we would also agree that the problem is not solved. if you look at what the fiscal objective is, i would say that what you want to do is put the debt on a downward path so it is not growing faster than the economy. what we have done is stabilized it. it is coming down for a couple of years. then it will come back up. we haven't reached the overall metric. we would agree there is more to do. thatnk we would all agree austerity, meaning significant deficit reduction right now in the short term, not the right thing for the economy. i believe we all think that. i certainly believe that. we are not focusing on deficit reduction now. that is not the problem. the problem is in the medium term and longer-term. i think where we might disagree is, how important is it to start working on those medium and long-term issues right away? i would say that what you do not need to do is put deficit reduction in place, you do not need to cut the deficit right now -- the deficit might be coming down too quickly. you need to make those decisions as quickly as possible. the continuing delay of, how are

we going to do with the biggest problem, after cost, even with the good news, health care is growing faster -- how will we deal with the aging of the baby boomers? we have continued to punt on how to figure out those challenges. how will we update our tax code so we can raise the to finance our budget through a more clean tax code than the one we currently have? i think we need to get to work on those things as quickly as possible. i'm sure there is disagreement on the perfect budget solution from where iris -- from where i stand. we need to get working on these trends as quickly as possible. we do not need to have two sides fighting for years and years revenue want this package, the spending package, and move towards the compromise. that is how i see that. bighad said, it would be a deal if we came out and said, deficit reduction is not the number one priority right now. i remember after the economic crisis, i would get calls --

, thesaid, oh my gosh deficit is $1 trillion. you must be apoplectic. the truth was, no. we weren't. that deficit was a result of a huge economic recession and the fact that we needed to take real measures in terms of deficit spending to deal with that. there are times, depending on where you are in the business cycle, where you want episodes. we are coming out of those -- where you want a deficit like that. we are coming out of that. there is a structural deficit problem we face. there is an imbalance between our spending and revenues. about whyy arguments you want to address those sooner rather than later and not let the political difficulties of these be an excuse for people continuing to delay making those , putting the policies in place, even though you can phase them in gradually when the economy is stronger, if people time to prepare. you want to make the decisions as quickly as possible and bring stability of knowing how we are

going to do with these challenges as quickly as possible. >> i wanted to respond to a few points. i will not take them in particular order. on the issue of health care costs, it is the case that health care costs have been moderately higher than inflation, but we are also at a 50 year low in terms of these numbers coming and in terms of thesel inflation -- numbers coming in terms of medical inflation. we should not assume that health care costs will stay at this level. the question that i think we have to grapple with is, neither should we assume that they will automatically go back up -- there are variables on both sides. for all we know, health-care costs could come in lower than cbo projections. the idea of taking this moment in time and putting in place

policies that will lock in decisions for generations seems to me something you may want to think about on those ends. having said that, we have proposed at cap lots of reforms to healthcare that address trying to move the progressive lowering healthcare costs, but we are mindful that middle and low income seniors have borne a lot of burdens. , a lot ofs recession middle and low income people have borne a lot of organs could putting greater burdens on them is a big question for us. -- borne a lot of burdens. putting greater burdens on them is a big question for us. that raises a second question -- we absolutely agree that an optimum situation is long-term deficit reduction -- having a plan -- i'm sure we all broadly agree. my point is that we should have

a long-term deficit reduction plan that invests in the economy think thatbut i washington -- it's up session -- it'sicit reduction up session with deficit reduction -- its obsession with deficit reduction. policymakers have not been focused on long-term growth, what to do to address long-term unemployment. political actors on all sides have been much more focused -- if you look at the house of representatives, they very little talk about long-term unemployment, economic growth measures that would address the suffering that people have right now -- the point we are making we all have some

responsibilities for these things, and we try to get a grand bargain. it has not happened because the house of representatives has been intransigent on the issue of revenues. we are sadly making the point, you could have a small term deal that works over the next couple sequestero substitute . tot also has investments address unemployment, invest in infrastructure, pre-k, other programs. holdhat we shouldn't hostage doing anything around economic growth rate now for a grand bargain that unfortunately has proved elusive. >> in the interview the president had with "the new york hees" this weekend, he says wants to move way from the damaging framework in washington on the deficit. --uestion for all of you

>> austerity, i think he used. >> too many blogs on that. >> to what extent does he deserve some blame for that? that would include the pivot when the administration pivoted in the first term to reemphasizing stimulus to deficit, and although i would say, although it has gotten less attention, the white house did not have to be in favor of letting the temporary payroll tax lapse at the end of this in retrospect were saying, they should have known it at the time. does the president deserves some of the blame or credit for that framework that he now decries? >> that is where i wanted to jump in. thank you for asking. i think the answer is probably some. say, from myto take -- i do not want to be unfair to anybody -- there is almost too much agreement appear. -- up here.

the budget deficit, which i believe was about 10% of gdp in 2009, is going to be under 3% by 2015. wase everybody up here alarmed about that, and saying, the budget deficit is falling too quickly, but that is not the way it has played out in the real world. forcesave been strong that have been pushing policymakers towards deficit reduction way too soon, in my humble opinion. it sounds discordant to hear groups that i think were assigned to this panel so that there will be some disagreement disagreement saying, no, we agree with that -- >> where is the disagreement? i invite everybody here, what are the policy measures -- not the frameworks for discussion -- >> i would say the policies you want to focus on are the ones that phase it in very slowly and compound savings over time. not only are we focusing on what

kind of savings we are getting in the first 10 years, but the second tenures are very important. to mimic the president put out recently, the the improvement to how we measure inflation, chained cpi, the kind of sense -- the kind of policy that would make a lot of sense. the growth of those savings becomes very large at the end of the decade and even larger in the longer term. this aim is to with a lot of kind of healthcare measures or anything we do on helping to strengthen social security that you would phase in gradually. those are the kinds of policies that actually are the ones that would get at our main debt challenges, but also i think fit with our economic situation right now. it would do a lot in the long term. i would think that what you want to do is trade out some of the more damaging cuts from the sequester and replace some of those mandatory savings. asking, -- that is forward-looking, and there i suspect we could have it -- for

good discussion with some disagreement. i think you're asking, somehow the budget us if it went from 10% of gdp. to 3%. how did that happen? i believe i was not part of the problem. i was arguing strongly against that, including when i was in the administration. was the president part of the problem? the pivot in 2010 came too soon. reasons why we did the work that we did to point out the changing deficit reduction is because i think we all have to acknowledge that while there was an overarching , your of voices organization, and many organizations were part of, that pushed for massive deficit reduction. deficit wasas, the 8% of gdp. eard andurt -- h

policymakers adopted that strategy. they heard your voices. they did not apparently hear any of the voices about -- very little voices around immediate action to reduce the deficit -- to invest in the economy now. they did very little on that score. what we are trying to say is, there is a reality that has changed. if you look at the letter from 2010,- the ledger from deficit reduction, we are doing way better than we thought we would, and economic growth, we are doing worse than we thought we would by now. said we wouldons be at 6% unemployment. we are at 7.5%. as policymakers, if we believe in short-term deficit reduction, -- i mean, short-term economic growth, then let's have ideas on that aggressively right now. the deficit picture has not changed. yet we are talking about chained

cpi again. where are the ideas about getting investments or growth thethat will address suffering people have right now around long-term unemployment? >> i was going to say, a lot of the decrease in the deficit has ,ome from the economy recovery not simply because of policy changes that took the meat cleaver to the budget, but some of the automatic stabilizers have reversed course. that is a good thing. that sort of deficit reduction was always going to take place and was not really the result of policy changes. ofould agree that some sequestration that has taken place in the last year is not good policy. it is not hugely responsible for the short-term decline in the deficit. it is part of the longer-term.

we did have the payroll tax cut expire and the tax cut go up on upper income people, and that has contributed somewhat to the smaller deficits this year. i do not think that the sudden ,rop in the deficit is a result solely the result of some relentless drive to put on the hairshirt and cut spending. >> setting aside the question of whether the deficit, whether we have done enough work on the long-term, and i think all of you would agree we have not, do think the deficit has come down too quickly in the short term? you think it should be higher than it is today? >> the deficit is still around 4% of gdp. not really. it is normalizing as the economy begins to recover. the question is, do you continue with policies like sequester, which is the wrong part of the budget, it's the things that are -- if you'rets

making domestic investments, they will come from those programs, and it will be increasingly difficult to do that. that is not a good thing policy- wise. i think suggesting the policy choices you make for deficit reduction i think is a good thing. >> what i hear them saying is a version of, look, the deficit is coming down a lot. economic growth is lower than forecast. -- themployment implement to population ratio is worse than we thought. the declining deficit caused more of that. i'm interested if you agree with that. do you agree with the idea that we have had an economically damaging amount of austerity, setting aside a long-term question, or the right amount of short-term deficit reduction so far? --nobody ever knows how the nobody knows what would've happened otherwise. if you look at the numbers and where the deficit reduction has come a big part of it has from the economy performing better than we thought it would,

but the economy is not on track. growth is not what it should be. there are a lot of policies that you need be dealing with to promote growth. one of those is switching out the wrong kind of deficit reduction in their for the right kinds. i do think the sequester will start to have a bite on the economy going forward. i do not know that it has so much. revenues, cap gains, people taking -- selling their stocks because they knew their taxes would go up. not to mention fannie and freddie. it will start to become a problem in terms of economic growth on two sides. one, the sequester spending cuts are cutting out the public investment that exist. -- that exists. too much too quickly. -- one of the things in this report, it talks , the truth is there are

many studies that show that that reaches a point where it is a drag on the economy. we do not know what that point is, but we know we are in a >> we do not need that is for no surprise you have too much debt. one has to be worried about that. what makes sense to think about, what we know about how to grow the economy echo we need to be looking at private investments, public investments, raising our revenue in a way that is good as possible for the economy. we are not doing very well on three of those four. we could be doing better on private investments. there is a whole congress of economic growth strategy which which sensible debt reduction has to be a part of. and >> i quite strongly disagree. >> you have been looking for that. [laughter] >> too much cable television.